basic japanese candlestick patterns

Basic Japanese candlestick patterns are essential tools for technical analysis in financial markets. These patterns, derived from centuries-old Japanese rice trading, offer insights into market sentiment and potential price movements. Some fundamental candlestick patterns include the Doji, Hammer, Shooting Star, and Engulfing patterns. A Doji signifies market indecision, with opening and closing prices nearly identical. Hammers and Shooting Stars indicate potential trend reversals, with Hammers forming at the bottom of downtrends and Shooting Stars at the top of uptrends. Engulfing patterns suggest a potential reversal, where one candlestick’s body engulfs the previous candlestick’s body. Understanding these basic patterns can help traders identify potential entry and exit points, assess market sentiment, and improve decision-making.